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Government social care council tax precept will not solve funding crisis, say councils and organisations

News, 16 December 2016

The government’s commitment to allow local authorities to raise council tax levels to help pay for adult social care will not solve the funding crisis in the sector.

Currently, councils can charge a social care precept of up to 2% on council tax – a measure introduced by previous Chancellor, George Osborne last year. This year, 144 of 152 local authorities chose to implement this, raising roughly £382 million for social care in the process. The government has now announced councils can add an additional 1% increase to this precept each year for the next 2 years. This could raise another £208 million in 17-18 and £244 million the following year, if fully adopted by local authorities across the country, according to learning disabilities service provider Dimensions.

However, this will not solve the funding problems in the sector. Lord Porter, chairman of the Local Government Association (LGA), noted that social care faces a funding gap of at least £2.6 billion by 2020. “Council tax rises will not be enough to prevent the need for continued cutbacks to social care services and very many other valued local services,” he said. “Already planned further £2.2 billion cuts to Revenue Support Grant to councils next year will far exceed the benefit of any extra council tax income.

“By bringing forward council tax raising powers, the Government has recognised the LGA’s call for the urgent need to try and help councils tackle some of the immediate social care pressures they face. Measures announced in today's settlement will help in part but fall well short of what is needed to fully protect the services which care for elderly and vulnerable people today and in the future.

“Councils, the NHS, charities and care providers have been clear both before and since the Autumn Statement about the need for an urgent injection of genuinely new additional government funding to protect services caring for elderly and disabled people. Given this unified call for action, it is hugely disappointing that today’s settlement has failed to find any of this new money to tackle the growing crisis in social care.

“Bringing forward council tax raising powers will help some areas in the short-term but extra council tax income will not bring in anywhere near enough money to alleviate the pressure on social care both now and in the future. Increasing the precept raises different amounts of money for social care in different parts of the country and will add an extra financial burden on already struggling households.

“[The] announcement of funding for social care from New Homes Bonus reforms is not new money but a redistribution of funding already promised to councils. It is wrong to present this as a solution, given the scale of the funding crisis. This is money which was taken from councils in the first place and this move will see money taken away from councils which is designed to incentivise new homes at a time when the Government has made boosting housebuilding a clear priority.

“The Government must recognise why social care matters and treat it as a national priority. There needs to be an urgent and fundamental review of social care and health before next year’s spring Budget. Local government leaders, who are responsible for social care in their local community, must be part of that review. This is imperative to get a long-term, sustainable solution to the social care crisis that the most vulnerable people in our society deserve.

“It also needs to include action to properly fund social care with genuinely new government money. This is now the only way to protect the services caring for our elderly and disabled people, which are at breaking point and ensure they can enjoy dignified, healthy and independent lives, live in their own community and stay out of hospital for longer.

“Next year will continue to be hugely challenging for all councils, who we estimate face an overall funding gap of £5.8 billion by 2020. Further government funding cuts will result in local authorities up and down the country having to make significant reductions to the local services communities rely on, including filling potholes, collecting waste, maintaining our parks and green spaces and running children's centres, leisure centres and libraries, to plug growing funding gaps.”

Many organisations involved in providing adult social care – to older people or those with mental ill health or learning disabilities – have also been heavily critical of the government’s action.

Steve Scown, CEO of Dimensions, said: “Having sleepwalked into this crisis, the government has now thrown local authorities a hospital pass. The money is a mere fraction of what is required, and by funding social care from council tax precepts we create a massive postcode lottery favouring the South.”

In addition, National Living Wage, introduced in April, is costing local authorities at least another £330 million, again according to Dimensions. New rules around night time payments for support workers will further eat into the differential. So the original precept more or less just maintained the status quo, and the new precept is simply not enough to make a difference.

Scown added: “Over the past 5 years, real-terms health funding has increased by nearly 20% whilst social care funding has fallen by 11% (and much more per capita.) Hopefully no-one in government is surprised, then, at last month’s data showing a 38% - yes, 38% - year-on-year increase in delayed hospital discharge rates, a wake-up call if ever there was one.

“Let’s not fall prey to Stockholm Syndrome. The system is still hostage to the treasury. Extra money for social care will be welcome but austerity remains austere, and the additional monies – primarily paid for by the poorest people in society - are nowhere near enough to reverse the years of underfunding in local government generally and social care specifically.”

Professor Martin Green, chief executive of Care England, agreed: “It is important to remember that this money will provide a temporary injection, but will not future-proof this sector. There has to be better accountability of how local authorities spend the precept: at present, few providers of frontline services have seen a meaningful change in the resources they have to provide care. A clear accountability trail is essential to progress. So too is an agreement on fair funding: we welcome the proposal of a Fair Funding Review, but call on government to engage with care providers in shaping its findings. We are also anxious to know the conditions attached the Adult Social Care Support Grant, and are concerned that this is not new money.”

Rossanna Trudgian, head of campaigns at Mencap, added: “The Government’s recognition of the funding crisis across the social care sector is long overdue… but increasing the social care precept on council tax is an inadequate measure which will fail to solve the funding crisis.

“Councils in poorer areas will struggle to raise enough money and the £240 million that is being redirected from the New Homes Bonus will not solve this. It is in these areas that people are most likely to need more access to social care services, meaning yet again, those who are in the greatest need of support are the ones being overlooked.

“The lack of funding for the sector means people with a learning disability are struggling to access the care and support they desperately need to ensure they are able to maintain their health, live independent lives and instead are stuck at home becoming increasingly isolated and worried about the future.

“At a time when people with a learning disability are facing significant cuts to their benefits, it is more important than ever that the Government develops a robust long term solution to the funding crisis. Solving this, so that people with a learning disability do not have to face the possibility of living without vital social care support any longer support they desperately need to avoid failing into poverty and ill health, is paramount.”